On exchanges, devil's in the details

For some of the states that managed to pass exchange bills this year, the fight over implementing health reform is far from over.

Showing that no battle is too small when it comes to health care reform, patient advocates are worried about the insurance industry influencing governance boards overseeing the health exchanges. That’s because the governance boards could be tapped to handle a lot of the heavy lifting on key policy questions, such as which health plans can sell on the exchanges and how to finance the online insurance marketplace and prevent conflicts of interest.

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Exchange governance boards will be busy between now and January 2013, when Health and Human Services must determine whether a state’s exchange passes muster. Building an exchange — an online marketplace where consumers can shop and compare health plans — will require information technology expertise, as well as an intimate understanding of how insurance markets operate. Ultimately, the boards will be responsible for striking the right balance between meeting consumer needs and supporting viable insurance marketplaces for the 24 million projected to enroll in exchanges by the end of the decade.

“It’s the governing body that is going to have to lay out the vision and make the day-to-day decisions to help the exchange go forward,” Stephen Finan, senior policy director of the American Cancer Society Cancer Action Network, said Wednesday during a panel on health exchanges.

So patient advocates are worried insurance industry stakeholders, including the health plans, brokers and agents, will have a seat at the governance table. To advocates, it’s the equivalent of the fox guarding the hen house.

“Since some of the decisions need to be made by exchanges include whether to retain or drop a health plan in the exchange, it’s very hard to have confidence in a governance system if there’s a conflict of interest,” said Ron Pollack, executive director of the pro-reform Families USA.

However, an exchange rule issued by the Obama administration in July bucks that view. The rule allows health insurers, brokers, agents and anyone else licensed to sell insurance to serve on governance boards with the caveat that they don’t dominate membership.

“We thought that was a very reasonable approach not to have the board dominated by insurer interests or insurer-affiliated interests,” Center for Consumer Information and Insurance Oversight Director Steve Larsen said. “These are to be run for the benefit of the health care consumer. We wanted to make sure the majority of the board is health care consumers.”

But patient advocates in Colorado say that’s exactly what’s happened on their exchange board, despite the law’s requirement that the majority of members “are not directly affiliated with the insurance industry.” The Colorado law allotted five appointments to Gov. John Hickenlooper, while allowing one each for the top Democrat and Republican in both chambers of the state’s Legislature.